We are studying mechanisms of controlling the expression of the gal operon of E. coli. We have demonstrated that the operon is controlled by two promoters, which are modulated by cyclic AMP in opposite ways. We have also previously shown that each of the two gal promoters is negatively regulated by binding of Gal Repressor to two operator elements, one of which (OE) is located upstream to the promoters and the other (OI) inside the galE structural gene. OE and OI are separated by 114 bp. We have proposed that Gal Repressor acts by affecting promoter structure from distal sites. Repressor bound to OE and OI interact by protein-protein contact to generate a DNA loop with altered conformation. The promoter which is part of the loop and thus has undergone conformational change is now inadequate for transcription. Several lines of experimental results are consistent with the model: (1) The precise contact sites in OE and OI DNA have been defined by DNase protection, purine methylation protection and phosphate ethylation interference studies. The location of the contact sites suggests that Repressor induces changes in the helical pitch of OE and OI DNA, reducing the number of bases per B-DNA helical turn from 10.5 to about 9.0. In a loop structure, any Repressor induced alteration in the two operator segments may be easily transmitted to the promoter region. (2) The total binding energy of simultaneous interaction of Repressor to OE and OI is higher than the sum of the intrinsic binding energies to OE and OI. The additional energy is easily explained by an interaction between two Repressors occupying OE and OI respectively. (3) The formation of a DNA loop requires that the angular orientation of the two Repressor binding sites, OE and OI, be favorable for the protein-protein contact. When the angular orientation was sequentially changed by introduction of segments of DNA of different lengths (15 to 37 bp) between OE and OI, a recurrence of derepression and repression of the gal promoters with increase of distance between OE and OI was observed, as was expected from a DNA loop model.